There are periods in life where we will all need a loan. When you decide to apply for a loan for personal needs, it is very important to understand what it entails, what the conditions are and how to choose the one most suitable for you.
There are a considerable number of banking or non-banking financial institutions on the market, as well as various offers and types of loans. In order to choose the most suitable lending method, we have put together all the information you need in a practical guide on personal loans.
What is personal needs credit?
The loans for personal needs are addressed to individuals, over 18 years of age. They can be accessed to meet all your personal needs. Unlike other types of loans, in the case of personal loans, no statements are required regarding the manner and purpose for which the loan amount will be used. Depending on the bank or non-bank institution chosen, it may differ both the maximum amount credited and the method of repayment.
Depending on the institution and the desired amount, loans for personal needs can be repaid over a period of 30 days to 5 years. For this type of credit, the process of granting is much faster, and the payment of the rates can be both weekly and monthly.
In what situations is it advisable to apply for such a credit?
At lite lender we support responsible lending. Thus, we recommend the use of personal needs credit as a reserve and less for current debts. Here are some examples where it is advisable to apply for a personal loan at fixed rates:
– Loan up to salary;
– Special events;
– Medical emergency;
– Car repairs;
– General home repairs;
– Holidays planned at the last moment.
When can I use it?
Our recommendation is to apply for a personal needs loan only when there is no financial reserve for the unforeseen situations listed above.
What is the award procedure?
The process of granting a loan for personal needs may differ depending on the institution chosen. Both banking and non-banking financial institutions offer different terms for granting credit. In the case of banking institutions, the process of granting this type of credit requires a longer approval time, compared to the term offered by the IFNs.
The same is true of the necessary documents. In general, banking institutions require the following documents:
- income statement;
- copy of the last tax return;
- utility bill (electricity, natural gas, telephone), but also other documents.
In contrast, most non-banking institutions require fewer documents. In the case of lite lender, we only request:
- copy by ID card;
- bank card details;
- login through a valid Facebook account.
In both cases, the documentation has been drastically reduced in recent years, but the main difference between banking institutions and IFNs is represented by the duration of the credit file analysis, the period being considerably shorter in the case of IFN loans.
What are the eligibility conditions for granting a personal needs loan?
Loans for personal needs can only be granted to individuals with a minimum age of 18 and with a permanent income for the entire duration of the loan repayment. In the case of banking institutions, one can request a minimum of 1 year old in the field of work and one seniority in the current place of work of minimum 3 months.
In the case of lite lender, in order to apply, you must meet the following conditions:
- you are at least 22 years old;
- hold a valid card to collect the monthly income;
- have a minimum monthly income of 1500 dollars;
- to have a personal email address, a real Facebook account and a valid mobile phone number.
What are the differences between personal loan loans offered by banking institutions and IFNs?
The main differences between banking and non-banking financial institutions are the duration of the analysis of the credit file, the period of granting the credit and the amount you can obtain.
The maximum amount you can claim is generally lower than for banks. In the case of IFNs, the repayment period is generally shorter, generally 3 months, but can reach up to 1-2 years. For banks, the repayment period can be extended up to 5 years, depending on the amount borrowed.
What are the advantages and disadvantages of lending through IFNs?
The main advantages of the credits offered through IFNs are:
- Simple and fast credit granting;
- The small number of documents required;
- Short time for file analysis;
- Obtaining credit online, without moving and queuing.
- Maximum amount offered;
- Loan repayment period.
A very important aspect that you have to pay special attention to when you decide on a personal needs loan, are the commissions, many of which are hidden.
In general, the cost of loans for personal needs consists of interest, to which the following commissions may be added:
- analysis committee;
- administration fee;
- reimbursement commission;
- the AEGRM commission, the registration fee in the Electronic Archive;
- life insurance.
The banking institutions also offer personalized interests, depending on the risk profile of each client, the value of the interest being revealed only after the risk analysis. DAE (effective annual interest rate) represents the present value of all present and future commitments, draws, reimbursements and costs, agreed by the creditor and the consumer for a period of one year. Do not forget, in the case of loans granted for a short period, DAE is not a relevant indicator, because interest is not calculated per year, but by the number of months, depending on the period of the loan.
The loans of personal needs are very diversified, thus, the interests and the costs can differ from one type of credit to another, from one institution to another. To avoid unpleasant situations, it is important to read carefully the terms and conditions for granting, as well as the conditions for repayment of loans.
Why apply for a personal credit loan through lite lender?
Since 2015 lite lender supports responsible lending and offers transparent, fully secure services. The maximum amount can be borrowed up to 3500 dollars, and the repayment is made in 3 fixed rates. In addition, we offer 3 ways of repayment. Thus, you can opt for the most accessible option for you: online payment by card from the customer account, bank transfer or cash deposit at CEC.
Why Choose lite lender?
- You receive the money immediately after checking the data, if the scoring is positive;
- Everything happens using the card data, without entering the IBAN or other data related to the bank account;
- The analysis of the credit applications is performed automatically, even outside the banking hours;
- We have no hidden fees.
In order to provide a transparent service, we provide you with the personal needs loan calculator, where you can see exactly how much interest and the amount you will have to repay.
For example, when you borrow 2000 dollars through lite lender, the total amount to be repaid will be 2238.8 dollars.
If you want to apply for a loan but are unsure of the total amount you will have to repay, check out the personal needs calculator here. We hope that this guide has been useful to you in understanding the important aspects of personal loans. If you have additional questions about this type of credit, the lite lender team is always available to you.
Have you recently applied for a personal needs loan? How was your experience? We look forward to your comment in the comment section below.